Jeff Judy

Jeff's Thoughts - December 19, 2012

Culture = Outcomes

In this issue of Jeff's Thoughts, my associate Nan Gesche addresses a common problem in our industry and many others: employees who do not really understand their organization's strategies. More about Nan below.

As parents, one of our goals is to teach our children values. By starting young in teaching and demonstrating our values, the hope is that when we are not there to help our children they will make good decisions. An example would be that we are a thrifty family and we like to eat healthy, which can be competing values. So how do my children choose between healthy and cheap when I am not around? Well, many times they go for the best compromise given that both of these are strong values (unless I am buying and then, of course, the healthy but more expensive option wins out).

As I work with client groups I often find that different people don't seem to have the same understanding of what things are most important in their organization. Many times when I am hired to help improve the productivity of a specific group, I find that there are competing objectives between what an organization says they want and what they actually do. It isn't uncommon for me to ask management for their strategic objectives, and then, when I ask their team members the same question, to get very different answers. If people don't even agree on what your goals and strategic objectives are, how can they productively focus their time and make good decisions?
If your bank is like many other small and mid-sized businesses, your employees represent both your organization's biggest expense and your most valuable asset. Your bank's productivity, and ultimately its profitability, depend on making sure all of your team members are actively engaged in implementing your strategic objectives while contributing at their fullest potential.

Yet research has shown time and time again that employees in the weakest-performing companies do not clearly understand the connection between their individual efforts and the overall goals of their employers. Indeed, in their 2001 book "The Strategy-Focused Organization," Robert S. Kaplan and David P. Norton stated, "A mere 7% of employees today fully understand their company's business strategies and what's expected of them in order to help achieve company goals." Even if that number is off by a fair amount, it seems unlikely that most organizations have achieved the desired level of alignment between the company's goals and the employee's understanding of those goals.
Employees who clearly understand their individual goals and see how they can make a direct contribution to the organization typically are more productive. This boost in employee productivity will naturally lead to increased operating margins and profitability for your company.

Meanwhile, it is all too easy to get sucked into completing the easy tasks where we see immediate results for our efforts. We need to make sure that we are spending time every day on strategic objectives. When people agree on, and are expected to focus on, the larger strategic objectives of the organization, more of their energy is applied in ways that make a difference to the company's outcomes. That tighter goal alignment and goal visibility allows for quicker execution of company strategies.
Performance management processes are key to setting and articulating goals. Do you:

Have goals and performance expectations that are consistent with your values?

Set clear objectives that pass the S.M.A.R.T. test (specific, measurable, attainable, relevant and timely) and that make sense at every level of the organization?

Go beyond one-way communication to share goals up, down and across reporting levels?

Create accountability by ensuring employees are ultimately evaluated against the S.M.A.R.T. goals?

Communicate expectations clearly during every phase of a project?

Model the behaviors you want your people to practice?

Achieving "goal alignment" at your organization is challenging, but well worth it. You must not only clearly communicate strategic business objectives across your entire company, you must consistently and regularly reinforce them through your ongoing performance management processes.

About Nan Gesche

Nan Gesche has seen banking from almost every possible perspective. From leading the training function for a bank holding company to her post as a bank examiner to her current consulting activities in the areas of communication, change, and organizational effectiveness. Nan has years of experience in finding out where things go wrong, and helping them to go right. You can learn more about Nan at the Associates page on my web site, or at Nan's own site at www.nangesche.com.